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Ford Motor : North America President Raj Nair out for unspecified inappropriate behavior

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02/22/2018 | 02:07am CET

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Feb. 21--Ford's North American president, Raj Nair, a key company veteran and one of the first people promoted by new CEO Jim Hackett, was ousted abruptly Wednesday amid an admission of "inappropriate behavior."

"I sincerely regret that there have been instances where I have not exhibited leadership behaviors consistent with the principles that the company and I have always espoused," Nair said in a statement released by Ford. "I continue to have the utmost faith in the people of Ford Motor Company and wish them continued success in the future."

The Dearborn-based automaker announced that Nair, 53, executive vice president in the company and president, North America, "is departing from Ford effective immediately."

It is another blow to a company hit by a recent string of sour turns. Ford has seen its stock price flatten over the past 12 months while competitors have shown strong growth. Already this calendar year, it has lost its new China CEO, said it expected weaker earnings in 2018, and Moody's Investors Service downgraded the company's credit rating outlook from stable to negative.

"The decision follows a recent internal investigation into reports of inappropriate behavior," Ford's statement on Nair said. "The review determined certain behavior by Nair was inconsistent with the company's code of conduct."

Nair's departure stems back to an anonymous tip received in recent weeks, which sparked the investigation. The company did not elaborate about the behavior.

"We made this decision after a thorough review and careful consideration," Hackett said in a statement. "Ford is deeply committed to providing and nurturing a safe and respectful culture, and we expect our leaders to fully uphold these values."

Nair has been president of Ford North America since June 1, 2017. Prior to that, he served as Ford's head of global product development and chief technical officer. He has held various director roles at Ford since 2000.

Nair's replacement will named soon, the company said.

Nair, a mechanical engineer by training, has been the point man for global product development. He was widely seen as one of a handful of potential CEO successors as well as a visionary who took a lead role at the Detroit auto show in January.

He was among four top Ford executives to receive a one-time retention bonus as Hackett was promoted in May 2017, to be paid in 2020. Nair was granted long-term stock incentives worth nearly $5 million, according to documents filed with the Securities and Exchange Commission.

"I'm floored. He was a very productive guy in product development," said Don Runkle, a former GM executive who now advises venture capital and private equity firms on technology investments. "It's always good to address any situation immediately and forthrightly."

In January, Ford announced the abrupt departure of Jason Luo, the CEO of Ford China after just five months on the job over what were described as "personal reasons that predate his time at Ford."

The company also has been battling ongoing sex harassment litigation from its factory workers in Chicago, inspiring a visit from Hackett last month.

And now this.

"It's disruptive," said a stunned Rebecca Lindland, executive analyst at Cox Automotive. "Jim Hackett is still finding his footing in his first year leading Ford. Wall Street hates uncertainty, so they'll have to fill this position quickly. The new car market is challenging enough without this kind of distraction and headache."

Nair held the role of president of North America, Ford since June 2017, leading all aspects of Ford's North American business units.

Previously, he was executive vice president, product development, and chief technical officer, a position he held since December 2015. He oversaw design, engineering, research and product development and played a key role in the company's expansion into emerging mobility opportunities, according to the Ford website.

He has worked on assignment in Europe, South America and Asia Pacific. He led a team that improved Ford's material cost competitiveness. And, as executive director of North American product development, oversaw the engineering and development for all truck and SUV programs including the best-selling Ford F-Series, Explorer and Expedition.

The Ford website notes that Nair, who has a bachelor's degree from Kettering University and is a board member, started with the company in 1987 as a body and assembly operations launch engineer and held roles with more than 11 vehicle programs in 13 assembly plants. He was launch manager for the European Fiesta and later Ford of Europe launches including the Focus, Transit and Mondeo.

Dave Sullivan, a product analysis manager at AutoPacific Inc., said Ford's handling of high-profile litigation at the Chicago Assembly Plant illustrates the company is serious about changing its image as an "old boys club."

"Due to the fast-changing nature of the business at Ford right now, this is not very good timing. As the company is making a transformation, to lose the top engineering talent?" Sullivan said. "He is the lead for all new products for Ford globally. I mean, the company is all about the product. And he is in charge of the product."

Whether on the factory floor or in the boardroom, the latest announcement shows Ford is tolerating no bad behavior, Sullivan said. "The company is bringing in change at all levels."

The ouster comes after a number of men in various industries have lost their jobs in recent months over allegations of sexual misconduct or harassment as the #metoo movement has swept into American consciousness. It is not clear Nair's departure fits under that umbrella.

No question, Nair was a "rising star," said Michelle Krebs, executive analyst at Autotrader. "Companies in all industry are scrutinizing complaints against employees and looking at their culture to make sure behaviors are appropriate. The auto industry is no exception."

She added, "This comes at a particularly bad time for Ford, which only last spring ousted Mark Fields as CEO. Investors and analysts have been unhappy with the seeming lack of a clear direction for Ford, especially in terms of future mobility services. The stock price has fallen. The pressure is on Jim Hackett, anointed CEO last spring, to lay out a clear road ahead for Ford."